This is the part where “warp speed” turns into “legislative slog.”
Friday marks the first day of negotiations between the two sides on a massive package that includes staggering spending and proposals to reshape entire portions of the economy. In other words, the details here matter. And that’s not a recipe for quick action.
The Senate Republican proposal was an opening bid. The real negotiations start Friday and the two sides are far apart. There are significant pressures — from the accelerating economic instability to legitimate safety fears for the senators in Washington — that “should” move the process quickly. But this is going to take some time.
Scroll to the bottom for a shorthand summary of the GOP proposal based on CNN’s read of the 247-page proposal Thursday night.
What to watch today
Top Senate and administration negotiators are meeting behind closed doors to begin official talks, starting at 10 a.m. ET.
What to read
On the Senate GOP proposal, via CNN’s Clare Foran, Ted Barrett and yours truly.
On the evolving but still far from progressing “work remotely” debate on Capitol Hill, via CNN’s Alex Rogers, Manu Raju and Lauren Fox.
Here’s your cold water
Here is the joint statement from House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer in response to the GOP proposal:
“We are beginning to review Senator McConnell’s proposal and on first reading, it is not at all pro-worker and instead puts corporations way ahead of workers.”
Here’s your reality check
Senate Republicans can’t pass anything without the help of Senate Democrats. Nothing at all will get through Congress without Pelosi’s signoff. Democrats have a lot of leverage here, and according to aides working on this, have no desire to give any of that up quickly.
It’s not just Democrats
More Republicans than are publicly acknowledged have issues with this proposal, according to senators coming out of the closed-door GOP lunch on Thursday.
One of them willing to say it publicly: Republican Sen. Josh Hawley of Missouri, who tweeted that the current bill “needs to be fixed.”
How this is going to work
The top Republicans and Democrats on the key committees, along with Senate leaders, Treasury Secretary Steven Mnuchin, and NEC Director Larry Kudlow, will meet behind closed doors this morning to start bipartisan talks.
This is not a recipe for a quick resolution, and Democrats are already dismissing the morning meet as “nothing but a show,” as one Democratic senator told me last night.
Ostensibly, the GOP process Majority Leader Mitch McConnell put into place — having the key committees hammer out the language of their piece of the proposal — will now be expanded across party lines, with each committee responsible for finding a compromise on their respective key components.
Again, having this many people involved is not how Congress moves quickly, at least based on historical precedent.
Just maybe: But — and this is a tenuous but at best — senators on both sides have been desperate for committees to dig in and legislate in a Senate chamber that has essentially become a judicial confirmation factory. Perhaps that helps spark things this time around.
The counter to that of course, is this, from a Senate Democratic aide, when I brought up that possibility: “That assumes the ability to legislate hasn’t atrophied to the point of nothingness.”
Your scheduling update
Mnuchin, who was on Capitol Hill Thursday, has continued to press lawmakers to get the stimulus package passed — through both chambers — and onto the President’s desk, by Monday, people met with him tell me.
To put this as bluntly as possible: that will not happen. Period. Lawmakers at this point are thinking the best-case scenario is by the middle of next week.
CNN’s Manu Raju has a great read on all the things that have to happen for this to come together:
Facts from Lindsey
Sen. Lindsey Graham, asked by CNN’s Kristin Wilson if the Senate can pass the bill by early next week: “If we don’t, we’re gonna get our ass kicked.”
Why that’s important: The desire to get this done, and get this done now, among the rank-and-file is palpable. There are two extremely visceral incentives for senators to reach agreement fast.
- The economy is about to fall off a cliff. Several senators told CNN on Thursday they’d been talking to state officials who say their weekly unemployment claims, in just the last three days, dwarf the *total* claims of the last three months. They are hearing job losses in the millions. Individuals staring down the first of the month knowing they can’t make ends meet. Businesses with zero chance of making payroll by the next pay period. That’s real, and it matters.
- Have also mentioned this a few times, but senators really don’t want to be in Washington, defying CDC recommendations right now. “It’s positively crazy that we’re here right now,” a GOP senator told CNN Thursday. The senator made clear massive stimulus was necessary and he wanted to work, but folks are really uncomfortable being back right now.
Does the above lead to a quick deal? Seems unlikely right now. Prepare for a long few days ahead. But recognize that this will likely *have* to come together by early next week.
What Democrats want
Pelosi has directed her committee chairs to draft their own proposal, which they are in the process of putting together. Expect a significant expansion and enhancement of unemployment insurance, as well as efforts to build on (and expand) the paid family leave provisions Democrats secured in the “phase-two” Coronavirus relief package signed into law this week.
Schumer and Pelosi have focused intently on a “Marshall Plan” for the health care system, which would surge resources toward hospitals and health care workers.
One thing to keep an eye on: the airline and distressed industry piece of this. Pelosi and Schumer have called for sharp executive compensation *and* stock buy-back restrictions to be tied to that piece. This will an issue to watch.
What’s in the Senate GOP Bill
Below is a brief summary of some of the key components of the Senate Republican stimulus proposal.
- For those making under $75,000 ($150,000 for couples): $1,200 ($2,400 for couples). $500 for each dependent
- The amount would be reduced by $5 for every $100 earned over $75k
- Payments would be fully phased out for individuals who made more than $99,000 in 2018 and married couples who made more than $198,000.
- Those with no tax liability but at least $2,500 of income would get a minimum of $600.
- Up to $50 billion in collateralized loans for passenger air carriers
- Up to $8 billion in collateralized loans for cargo air carriers
- Restrictions on executive compensation for a two-year period
- Excise tax holiday for airline industry
Distressed industry relief: Up to $150 billion for distressed industries, with little detail as to which companies would qualify, beyond that the Treasury Secretary determining operations are endangered due to the pandemic.
Business tax breaks:
- Defer employer-side payroll taxes
- Increases the limit on interest deductibility
- Allows companies to carry back net operating losses, over the last three years, for up to five years
- Allows retailers and restaurants to write off a full year of costs of renovations in the year they were made
Small Business Loans:
- $299.4 billion for loans to companies and private non-profits with fewer than 500 employees
- The program would be run through the SBA, but the loans would come from banks and approved lenders, with an SBA guarantee, up to $10 million, and directed toward monthly costs — salaries, payroll, debt and mortgage payments.
- Any loan would be forgiven if used for those purposes.
- Creates liability protection for the manufacturers of respirators and PPE production
- Codifies that coronavirus tests will be cost-free to policy holders. Additionally,
- Requires coverage of coronavirus vaccines as a preventive service, at no cost to patients.
- Establishes Medicare payment for treating coronavirus patients.
- Suspends 2% Medicare payment cut to providers
Also this interesting nugget: The package includes a provision that would temporarily allow the Treasury Department to backstop money market mutual funds, something that was barred after a similar action was taken during the 2008 financial crisis.